The Pros and Cons of Becoming an Uber Driver

Back in November, I started driving for Uber. For those of you who don’t know,  Uber develops, markets and operates the mobile-app-based transportation network. The Uber App allows consumers to submit a trip request, which is routed to crowd-sourced “taxi drivers.”  As of March 26, 2015, the service was available in 55 countries and more than 200 cities worldwide.

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Uber, depending on the area, provide riders (and entrepreneurs) with a variety of options. On the low end, there is UberX, a low-cost option where drivers use their own cars, and the selections go up to UberBlack, a premium option similar to a limo or metro car service. The costs of these services vary based on the particular market. I am an UberX driver.

In order to become an UberX driver, you must:

  1. Have a newer, 4-door vehicle that passes any required state inspection,
  2. You must be able to provide proof of insurance,
  3. You must have a clean driving record, and
  4. You must pass a criminal background check.

Once approved, you download the Uber Partner app to your Android or iPhone, turn it on, and start accepting riders.

The Pros and Cons of Becoming an Uber Driver

The Pros and Cons of being an Uber Driver come down to one issue: you are self-employed.  Those that understand what it means to be an Independent Contractor and Entrepreneur do well. Those that think like an employee will not, and will inevitably complain that Uber is not taking care of them like an employer would.

Think like an owner, not an employee. Talk to any business owner, and they will tell you, they work well beyond 40 hours a week to be successful.  That doesn’t mean you need to do this with Uber. If all you are looking for is a few $100 a week additional income, you can easily do that working Friday and Saturday night.

Controlling Costs seems to hammer many Uber drivers, who have no experience being self-employed. Everything you purchase while driving or caused by your driving reduces your profits:

  • Fuel,
  • Oil and Maintainance,
  • Vehicle Depreciation,
  • Handouts to riders, and even
  • Coffee at Wawa.

Most of these costs can be written off on your taxes, stuff like buying yourself coffee on the road can’t, but it all reduces your profits, and profits are your actual income.

Some easy tips: Uber provides drivers with many great tips and training videos, but following them blindly can reduce your profits. So, here are my tips for making the most while driving for Uber.

  1. Find a Prime Location: This may take a little time for new drivers, but you want to find a location that is “HOT” within a 5-mile radius.  This will keep a majority of your ride requests within 10 minutes of you traveling to the pickup point.
  2. Work the Best Times: Know when the best times to drive are, and work them. This would include morning and evening drive time (aka rush hours), Friday and Saturday evenings, and maybe even Sundays. You will become very discouraged if you are working Off-Peak times.
  3. Limit Unpaid Miles: These are the miles you drive, while working with Uber, but are not getting paid for.  This is the big one. Limit cruising around to find riders: Every unnecessary mile you drive is lost income. Find a prime location, park, and wait.~Do not accept ride requests that are too far:The Uber Partner App will tell you about how long it should take you to reach your rider. Do not accept rides over 20 minutes away. Think about it… 20-minute drive to pick up, a possible wait of 5 or so minutes for the rider to be ready, and then come to find out they only want to go 2 miles down the road. Not only have you lost money on that trip, you lost potential money being unavailable for other riders for 30 minutes.~Don’t let the App control you: Some drivers, in an effort to control unpaid miles, will let the Uber Partner App control them. After dropping their first rider off, they find a place to park, and wait for the ride request. They then repeat the process until they decide they are done for the night.This does work to a point, but it can also backfire. You can experience a situation where ride after ride takes you farther from home. You then end up with a 1.5-hour drive home. That is a lot of unpaid miles.One way to help solve this is when a rider takes you out of your Prime Location, only accept riders with pick up points going in the direction you want to drive. The rider may not be traveling in the direction you want to go, but it does help keep you traveling too far from home.

    ~Don’t Chase the Surge:
     Uber uses Surge Pricing to control demand. If an area has higher demand than the number of drivers available, they will increase prices. Sometimes it could be 1.5 times the regular price, and I have seen as high as 4.3 times the regular price. The Surge Pricing is used to get riders to slow down requests, and encourage drivers to move into an area.The issue for you is that once enough drivers move into an area, or demand sufficiently drops, Uber goes back to regular prices. I can’t tell you how many times I moved to a Surge area, only to have the Surge Pricing disappear the moment I got there. You can’t get mad at Uber, the Surge worked the way it was supposed to.
  4. Protect your Star Rating:  The Star Rating is a system for riders and drivers to rate each other, and this is especially important in markets where Uber has launched VIP status.  Riders who get upgraded to VIP status have the option of using drivers with only a 4.8-star rating, or above.  This means the best drivers have more potential riders and make more money. Uber gives some great tips, but I have a few more.

    ~Do not accept ride requests that are too far:
     Looks like I am repeating myself here, but this has a big impact on your Star Rating. Many riders have come to expect an Uber will be available nearby, all the time. When that doesn’t happen, and they have to wait 20-30 minutes for the closest driver, they will take out their frustration on you. I know from experience.  There was a time I had a 100% Acceptance Rate, and both my Star Rating and wallet suffered for it. Since I have cut out accepting riders with ETAs of more than 20 minutes, my weekly Star Rating has consistently been between 4.8 and 5 Stars. Unfortunately, it took me a while to figure out this was a problem, and my overall Star Rating is stilling at 4.71, but it has been climbing every week since I made this change.

    ~Do not accept riders with low Star Ratings:
     Always be careful picking up riders with Star Ratings under 4.5, and never pick up a rider under 4. These low ratings have nothing to do with the ratings they have given drivers. However, it does show you that they have given drivers grief. If they have given other drivers a hard time, you can expect to receive a hard time, and if you don’t behave to the standards of these unreasonable riders, it could affect your rating.
  5. Work Blocks of Time: If you are only working one or two hours here or there, don’t expect to see any real money. This is my recommendation for the more casual driver. If you get off work, at your regular job, at 5pm, turn on your app. Sit at your job for 15 minutes before leaving to try and pick up a ride. Half way home, stop at a convenience store and park for 15 minutes. When you get home, leave your app on for another 15 minutes.Using this method, if you have added 45 minutes to your typical commute, and you did it during a time of Peak demand. However, don’t expect to be home before 8pm. If you do this Monday thru Friday, your can expect to work with Uber 15 hours a work, and reasonably expect (depending on your market) to average $20-25 per hour.Keep in mind, we are talking about an average per hour rate. There is gong to be “bad days.” You need to work consistently, over a period of time. The will be some days you don’t make $10 per hour, and other days you will make $35 per hour or more.

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Be you own boss! You can drive with Uber and make great money as an Independent Contractor,  getting paid weekly for helping Uber’s community of riders get around town, safely.

10 thoughts on “The Pros and Cons of Becoming an Uber Driver

  • May 3, 2015 at 12:36 am
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    Good article, treat it as business, learn business basics and learn from this experience as you may consider another business opportunity if this one does not work out for you

    Reply
  • May 3, 2015 at 4:49 am
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    This was a really informative post, and you included many solid recommendations for making the most of driving for Über.

    I like how you recommend the perspective of being an “owner” rather than an employee. Certainly the vast majority of people don’t understand what is required for a business to survive, let alone flourish.

    I started using Über two years ago and really like it. Our youngest son started driving for Lyft, and I’ve been less impressed with it.

    Wishing you continuing success with Über.

    Reply
    • May 3, 2015 at 9:27 am
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      Lyft just moved into my area. Everything I have heard about them, makes it seem they are a carbon copy of Uber. However, from a driver’s perspective, Uber is far more established, and Lyft is just a little late to the game… kinda like McDonald’s vs Burger King.

      UberBlack launched, in my area, more than a year ago. UberX entered this market last fall. Uber also did the heavy lifting dealing with state legislators and regulators. Plus, I think Uber does a better job advertising themselves, especially with product placement in TV shows and movies.

      If your son is still doing Lyft, I think my recommendations apply. However, if he is doing everything “right,” and still not successful, switching to Uber may make the difference.

      Reply
  • December 9, 2016 at 12:06 pm
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    I just started working for Uber and my first two weeks were great. But yesterday I went out to get a few rides and in 3.5 hours I only made $25. This was not a HOT time though. How can you not accept a trip because its too far out? I thought they do not want you canceling trips which affect my rating.

    Reply
    • December 9, 2016 at 4:25 pm
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      Thanks for adding to the conversation. They don’t want you canceling the rides, but you can if you don’t make it a common practice. The key is to evaluate the pickup distance before accepting the ride. The unpaid miles to pickup up a passenger can dramatically lessen your profits.

      Reply

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